Anika Therapeutics Reports First-Quarter 2013 Financial Results

  Anika Therapeutics Reports First-Quarter 2013 Financial Results

   Achieves Net Income Growth of 60%, Earnings Per Share of $0.21, and Cash
           Generated from Operations of $6 Million for the Quarter

Business Wire

BEDFORD, Mass. -- May 1, 2013

Anika Therapeutics, Inc. (Nasdaq: ANIK), a leader in products for tissue
protection, healing and repair, based on hyaluronic acid (“HA”) technology,
today reported financial results for the quarter ended March 31, 2013.

Management Commentary

“Anika began 2013 with a solid first quarter,” said Charles H. Sherwood,
Ph.D., president and chief executive officer. “Our Orthobiologics franchise
continues to be strong. Total revenue grew 6% from the first quarter last
year. Product gross margin was up substantially, which became the primary
driver for a 60% increase in net income for the quarter.”

“Our growth in Orthobiologics continues to be driven by the U.S. demand for
our flagship product, Orthovisc^®,” said Sherwood. “First-quarter U.S.
Orthovisc revenue was up 12% from the same period last year. This growth
reflects the marketing and sales investments that our partner, Depuy Mitek,
continues to make in an effort to broaden awareness and expand penetration of
Orthovisc in both the physician and patient communities across the country.”

“Anika’s operating income for the first quarter increased 64% from the same
period last year,” said Sherwood. “This was driven by our continued product
revenue growth together with significant improvement in our product gross
margin, due to several key factors. They include the elimination of dual
facility costs as we closed the Woburn, Massachusetts facility in mid-2012;
the continued realization of savings from manufacturing efficiencies at our
new Bedford, Massachusetts facility; and a more favorable product mix in the
quarter compared with the first quarter of last year.”

“We are encouraged by Anika’s prospects for continued growth in 2013,”
Sherwood said. “We began the year with Orthovisc positioned as the market
leader in the U.S. multi-injection segment and the number two U.S. brand in
viscosupplementation overall, and demand for Orthovisc remains solid. We are
continuing to improve the operating leverage in our business by driving
efficiencies and capitalizing on our manufacturing improvements, and our
pipeline development initiatives remain on track.” Sherwood concluded.

Revenue

For the first quarter of 2013, total revenue grew 6% to $15.2 million, from
$14.4 million a year earlier. The company’s revenue growth was primarily
driven by increased domestic sales of Orthovisc and Hyvisc.

Product Gross Margin

Product gross margin for the first quarter of 2013 improved 1,370 basis points
to 66.6%, from 52.9% in the first quarter last year. The improvement for the
quarter was driven by manufacturing facilities consolidation, realization of
operational efficiencies, as well as favorable product mix. Although the
company expects to continue to benefit from the manufacturing efficiencies,
the result this quarter is not indicative of future quarters due to revenue
mix.

Operating Expenses

Research and development expenses for the first quarter increased 3.2% from
the first quarter of last year. The increase reflected preparation activities
for the company’s Cingal clinical trial and new product pipeline initiatives.
The increase was partially offset by non-recurring development expenses
related to Hyalograft C autograft in the first quarter of last year. Selling,
general and administrative (“SG&A”) expenses in the first quarter of 2013
increased to $4.0 million, from $3.4 million in the first quarter of 2012. The
increase in SG&A was primarily due to personnel and external professional
expenses.

Operating and Net Income

Operating income for the first quarter of 2013 increased to $5.0 million, from
$3.1 million in the same period in 2012. Net income for the first quarter of
2013 rose to $3.1 million, or $0.21 per diluted share, from $1.9 million, or
$0.14 per diluted share, in the first quarter last year. The achievements in
operating and net income, and earnings per share are primarily driven by the
improvement in our product gross profit.

Cash and Cash Equivalents

Anika’s cash and cash equivalents at March 31, 2013 increased to $51.0
million, from $44.1 million at December 31, 2012, driven primarily by higher
profits, and significant increase in cash collections on accounts receivable.

Conference Call Information

Anika will hold a conference call to discuss its financial results, business
highlights and outlook tomorrow, Thursday, May 2, 2013 at 9:00 a.m. ET. In
addition, the company will answer questions concerning business and financial
developments and trends, regulatory activity related to Monovisc, and other
business and financial matters affecting the company, some of the responses to
which may contain information that has not been previously disclosed.

To listen to the conference call, dial 866-825-1709 (international callers
dial 617-213-8060) and use the passcode 28203075. Please call approximately 10
minutes before the starting time and reference Anika Therapeutics. In
addition, the conference call will be available through a live audio webcast
in the “Investor Relations” section of the Anika Therapeutics website,
www.anikatherapeutics.com. An accompanying slide presentation also can be
accessed via the Anika Therapeutics website. The conference call will be
archived and accessible on the same website shortly after the conclusion of
the call.

About Anika Therapeutics, Inc.

Headquartered in Bedford, Mass., Anika Therapeutics, Inc.  develops,
manufactures and commercializes therapeutic products for tissue protection,
healing, and repair. These products are based on hyaluronic acid (HA), a
naturally occurring, biocompatible polymer found throughout the body. Anika’s
products range from orthopedic/joint health solutions led by Orthovisc^®, a
treatment for osteoarthritis of the knee; to surgical aids in the
anti-adhesion and ophthalmic fields. The company also offers  aesthetic dermal
fillers for the correction of facial wrinkles. Anika’s Italian subsidiary,
Anika S.r.l., provides complementary HA products in orthopedic/joint health
and anti-adhesion, as well as therapeutics in areas such as advanced wound
treatment and ear, nose and throat care. Its regenerative technology advances
Anika’s vision to offer therapeutic products and medical solutions that go
beyond pain relief to protect and restore damaged tissue.

The statements made in this press release which are not statements of
historical fact are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include, but are
not limited to, those relating to:(i) our discussions with the FDA regarding
U.S. regulatory approval of Monovisc, including the FDA’s decision regarding
the recently submitted PMA amendment, and our abilities to obtain FDA approval
for Monovisc, (ii) future demand for Orthovisc, (iii) the company’s plans to
continue streamlining operations and improving its manufacturing capabilities,
(iv) the prospects for the company’s product pipeline, and (v) expectations
regarding research and development spending, and selling, general and
administrative spending. These statements are based upon the current beliefs
and expectations of the company's management and are subject to significant
risks, uncertainties and other factors. The company's actual results could
differ materially from any anticipated future results, performance or
achievements described in the forward-looking statements as a result of a
number of factors including (i) the company's ability to successfully commence
and/or complete clinical trials of its products on a timely basis or at all,
obtain pre-clinical or clinical data to support a pre-market approval
application or 510(k) application, or timely file and receive FDA or other
regulatory approvals or clearances of its products, or that such approvals
will not be obtained in a timely manner or without the need for additional
clinical trials, other testing or regulatory submissions, as applicable; (ii)
the company's research and product development efforts and their relative
success, including whether the company has any meaningful sales of any new
products resulting from such efforts; (iii) the cost effectiveness and
efficiency of our clinical studies, manufacturing operations and production
planning; (iv) the strength of the economies in which the company operates or
will be operating, as well as the political stability of any of those
geographic areas; (v) future determinations by the company to allocate
resources to products and in directions not presently contemplated, (vi) the
company’s ability to launch Monovisc in the U.S., if at all; (vii) the
company’s ability to provide an adequate and timely supply of its ophthalmic,
Orthovisc and other products to its customers, (viii) our ability to
successfully manage and turnaround Anika S.r.l.’s business, and (ix) the
company’s ability to achieve its stated growth targets. Certain other factors
that might cause the company's actual results to differ materially from those
in the forward-looking statements include those set forth under the headings
"Business," "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the company's Annual Report
on Form 10-K for the year ended December 31, 2012, as well as those described
in the company's other press releases and SEC filings.

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)

                                                Three Months Ended March 31,
                                                  2013            2012
Product revenue                                 $ 14,494,489      $ 13,613,328
Licensing, milestone and contract revenue         752,522           747,332
Total revenue                                     15,247,011        14,360,660
                                                                    
Operating expenses:
Cost of product revenue                           4,841,170         6,413,481
Research & development                            1,582,910         1,533,103
Selling, general & administrative                 3,947,114         3,351,016
Restructuring charges                             (135,607)         -
Total operating expenses                          10,235,587        11,297,600
Income from operations                            5,011,424         3,063,060
Interest expense, net                             (39,558)          (51,203)
Income before income taxes                        4,971,866         3,011,857
Provision for income taxes                        1,903,864         1,099,738
Net income                                      $ 3,068,002       $ 1,912,119
                                                                    
Basic net income per share:
Net income                                      $ 0.23            $ 0.15
Basic weighted average common shares              13,406,952        13,162,824
outstanding
Diluted net income per share:
Net income                                      $ 0.21            $ 0.14
Diluted weighted average common shares            14,357,110        14,089,946
outstanding
                                                                    

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
                                                           
                                               March 31,          December 31,
ASSETS                                         2013               2012
Current assets:
Cash and cash equivalents                    $ 50,965,566       $ 44,067,477
Accounts receivable, net of reserves of
$327,270 and $337,459 at March 31, 2013        14,784,266         21,462,481
and December 31, 2012, respectively
Inventories                                    9,947,961          8,283,472
Current portion deferred income taxes          1,989,422          2,031,583
Prepaid expenses and other                     1,007,669          1,539,477
Total current assets                           78,694,884         77,384,490
Property and equipment, at cost                51,566,576         52,376,013
Less: accumulated depreciation                 (17,087,726)       (17,263,032)
                                               34,478,850         35,112,981
Long-term deposits and other                   162,545            171,053
Intangible assets, net                         19,229,922         20,334,636
Goodwill                                       8,792,165          9,065,891
Total Assets                                 $ 141,358,366      $ 142,069,051
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                             $ 2,696,550        $ 2,341,838
Accrued expenses                               4,252,574          5,837,044
Deferred revenue                               2,191,667          2,875,067
Current portion of long-term debt              1,600,000          1,600,000
Income taxes payable                           -                  1,798,669
Total current liabilities                      10,740,791         14,452,618
Other long-term liabilities                    1,294,140          1,541,124
Long-term deferred revenue                     2,111,111          2,152,778
Deferred tax liability                         6,784,019          6,997,397
Long-term debt                                 7,600,000          8,000,000
Commitments and contingencies                  -                  -
Stockholders’ equity:
Preferred stock, $.01 par value;
1,250,000 shares authorized, no shares
issued and outstanding at March 31, 2013       -                  -

and December 31, 2012
Common stock, $.01 par value; 30,000,000
shares authorized, 14,006,135 and
13,866,060 shares issued and outstanding       140,061            138,659
at March 31, 2013 and December 31, 2012,
respectively.
Additional paid-in-capital                     67,014,641         65,431,424
Accumulated currency translation               (3,404,080)        (2,654,630)
adjustment
Retained earnings                              49,077,683         46,009,681
Total stockholders’ equity                     112,828,305        108,925,134
Total Liabilities and Stockholders’          $ 141,358,366      $ 142,069,051
Equity
                                                                  

Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
Revenue by Product Segment and Product Gross Margin
(unaudited)
                                                         
                          Quarter Ended March 31,             
Product Segment:          2013               2012               %
Orthobiologics            $ 11,283,547       $ 10,116,845       12  %
Dermal                      241,584            501,315          -52 %
Surgical                    988,864            983,628          1   %
Ophthalmic                  928,458            1,323,994        -30 %
Veterinary                 1,052,036        687,546         53  %
Total Product Revenue     $ 14,494,489      $ 13,613,328      6   %
                                                                
Product gross profit      $ 9,653,319        $ 7,199,847
Product gross margin        66.6       %       52.9       %
                                                                
                          Quarter Ended March 31,             
Geographic Location:      2013               2012               %
United States             $ 11,566,779       $ 10,390,045       11  %
Europe                      1,547,914          1,770,752        -13 %
Other                      1,379,796        1,452,531       -5  %
Total Product Revenue     $ 14,494,489      $ 13,613,328      6   %
                                                                    

Contact:

Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., 781-457-9000
CEO
or
Sylvia Cheung, 781-457-9000
CFO